To Charge or Not To Charge Business License Fees

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San Diego city staff have increased revenue from business license fees from $7 million to over $9 million a year, by collecting from companies that were delinquent.

But a San Diego city councilman wants the mayor to consider giving businesses a fee amnesty. KPBS reporter Alison St John has more.

San Diego is one of many California cities that now compare state tax returns with the their own records of who does business in the city.

Robbin Kulek in the City Treasurer’s office says last year San Diego raised an extra $2.6 million in fees and penalties from businesses that were paying state taxes but hadn’t paid the city their license fee
.

Kulek:
We estimate that once we’ve done these big files, these program will bring in 1 to 1.5 million dollars annually.

San Diego’s business fees are some of the lowest of any large city in the state: $34 a year for a small business. But with penalties for late payment, the bill can be hundreds of dollars.

City Councilman Carl DeMaio wants the city to give businesses a boost in this tough economic year: a fee amnesty, or a fee holiday. He says that could generate more money in the long run, by encouraging more businesses to get started.

DeMaio :
That has been used successfully in Los Angeles several times and in fact the mayor of L.A. estimates that will actually bring in $5 million more in revenues.

A fee amnesty is likely to benefit San Diego significantly less.

Kulek says L.A.’s business taxes bring in about $300 million a year, compared to less than $10 million in San Diego. And she says abolishing penalties will only encourage more businesses not to pay up in the future.